 Sunday, March 25, 2018

https://dailyasianage.com/news/114056/prospect-of-jute-in-bangladesh

Prospect of jute in Bangladesh

M S Siddiqui

Bangladesh is an agro-based economy with about 45 percent employment of labor force and
accounting for 18 percent of countries GDP. Jute is one of the major cash crops in
Bangladesh.Bangladesh used to enjoy a monopoly position in the production and marketing of jute
during 1950s and 1960s.

It is under challenge from other producers such as India, China, Uzbekistan, and Nepal. Bangladesh
is still largest exporter of jute and jute goods with 40 percent global export and second largest
producer of jute fiber with around 30 percent of the total world production. Unfortunately Bangladesh
is only exporting country of raw jute without any other value addition.

People worldwide are avoiding harmful polythene in their daily lives while entrepreneurs in the
country are investing on jute and jute goods to regain its lost glory. It was a surprise how the Jute
and jute products were not "agricultural products" in the documents and policy of the government
despite these are branded as 'golden fiber'.

The present government has by this time declared jute and jute products as agricultural products so
that the manufacturer could get government subsidy. Bangladesh government has already made
jute sacks use mandatory for packing major items like rice, wheat, fertilizer, sugar.

Jute has many advantages. The value addition of export is almost 100 percent and the farmers are
beneficiary of export. In addition, jute plants improved soil productivity because of its massive leaf
fall and root proliferation in the field.
Traditionally jute fiber has been used to manufacture the packaging materials like hessian, sacking,
ropes, twines and home textiles as carpet, carpet backing cloth etc. These products are under
challenge from synthetic substitutes. On the other hand, demand has been increased for natural
fiber like jute is due to their low cost, low density, biodegradability, renewability and abundance in
production over demands. The global awareness of climate change and improvement of people's
living standards and need for environmental protection, the demand of natural biodegradable and
eco-friendly fibers is rising worldwide day by day.

The traditional jute products such as rope and some ordinary fabrics have declining earning and
challenge of other competitive high earning agricultural products. Jute industries are not in need of
new technologies and diversification of products with high value and or competitive intermediaries or
final products. By this time, some innovative new products have been developed with high value-
addition such as home textiles, jute composites, jute geo-textiles, paper pulp, technical textiles,
chemical products, handicrafts and fashion accessories etc.

A revolution is awaiting with discovers of a new concept and technique for blending the jute with
other fibers like polyester, acrylic, wool etc. to manufacture the diversified yarns with small
modification of technologies and machines. These jute blended yarns are already in use for value
added product for home textiles, decorative fabrics, handicrafts, geo-textiles, carpet backing cloth,
shopping bags etc. The end fabrics got different characteristics of quality, comfort, hygiene and cost
benefits etc.

At present Bangladesh currently earns $600 by exporting per ton raw jute. These diversified
products can increase value of the exports by 10 times and per ton diversified jute products can
bring $3,000-$10,000 depending on the quality and type.

Environmental concerns have also brought a change in the consumers' choice of products.
Consumers now increasingly prefer more green products. Many developed countries are going to
replace the use of plastic goods with environment-friendly products. Bangladesh also need more
research for diversification of the products as consumers were changing their choice time to time.

Bangladesh export is dominated by Garments. The garment is a very temporary product and always
shift to low costs countries and can never be a reliable and permanent product for export earnings.
Being an agricultural product Jute can contribute more than our garments. Jute with value addition
holds the potential to become the next key driver of the economy as the present ones -- garments
and remittance. "Bangladesh needs a new growth driver. In this case jute and jute goods can be the
main driver soon," said Hossain Zillur Rahman in a recent seminar.

The mandatory use of jute bags for certain packaging increases production of more than 100 crore
sacks and local entrepreneurs expanded the export base increasing the types of jute goods from
135 last year to 240 in 2017-18. The government gave out subsidy on diversification of jute goods.

Jute is a viable fibrous source for papermaking by mechanical pulping processes in our region due
to availability of surplus in production available for diversified value added products. Bangladesh
requires a feasibility study and involvement of dynamic entrepreneurs in this sector.

At present, there are about 250 jute mills in the country, combining both private and public sector
mills. The govt. mills are operating under Bangladesh Jute Mills Corporation (BJMC). There are
about 30 mills under BJMC. In the private sector there are two types of mills-some are conventional
jute mills and some are producing jute yarns. There are 126 conventional jute mills and these are
operating under Bangladesh Jute Mills Association.
The major challenge is now the state-owned jute mills with huge loss and default loan. The banks
are also in risk due to default loan of Jute Mills Corporation. Finding no other alternate, the
government signed an agreement with the World Bank/IDA during 1994 to reform the jute sector,
which mainly translated into: (1) closing nine of the 29 jute mills and downsizing two large publicly-
owned jute mills; (2) retrenchment of about 20,000 jute workers of publicly-owned jute mills to other
public sectors; and (3) privatization of 18 of the remaining 20 jute mills. The then government has
taken a courageous decision and shut down of Adamjee Jute Mills on 24 June 2002.

The government has proposed a Draft National Jute Policy 2014 with the objective of (a) increase
jute production in response to national and international demand; (b) land use planning for jute; (c)
produce high quality jute seeds and distribute these to farmers; (d) develop modern varieties of jute
and encourage adoption by farmers; (e) protect the market for jute and jute products to increase
foreign exchange earnings; (f) develop modern equipment and improve existing jute processing
mills; (g) encourage diversified use of jute; (h) increase interaction and institutional linkages amongst
jute and jute seed producers, traders, jute industries, and the Bangladesh Jute Research Institute;
and (i) strengthen the Management Information System (MIS) of the jute sector; (j) establish
composite jute mills to produce high-quality fabric from jute; (k) establish professional design
institute to develop various designs of jute and jute products to meet international demand; (l)
automation of the MIS of the jute sector; and (m) prioritize the jute sector in the National Export
Policy of Bangladesh.

The vision of the Draft National Jute Policy 2014 has promise of reopening all of the closed jute
mills, the modernization of the mills, and establishing jute as the second most important export item
by 2021. On the other hand, the experience of Bangladesh is different.

The closure of the biggest jute mill has relieved government of paying subsidy to the jute mill and
also set up of few jute mills in private sector with old machinery of Adamjee Jute Mills. Those mills in
Jessore and Bogra district are successfully exporting jute goods with profits and created job for
thousands of workers. The Draft National Jute Policy 2014 has not been finalized yet.

Bangladesh may go for more study on diversified products of jute with collaboration of private sector
entrepreneurs and also shut down the non-viable and sick jute mills in both government and private
sector and encourage setting up new jute mill with advanced technology for diversified jute products.

Government is very kind to the workers of garment sector and set up wage board but neglecting
workers of other sectors including jute. After long few hundred years of positive role in the economy
of this region, the present government has declared jute and jute goods as 'agricultural good' for
benefit of export.

The government has been favoring the garments sector over the years and similarly should give
appropriate policy support for jute and jute goods. Jute may be a driver of economic growth with
proper policy support and due attention.

The writer is a legal economist